2. 16:15 – 18:00 Session Four Open Forum: Working Together Towards Alignment and Selectivity Moderators: Michael Koch, Director, Trust Fund Operations, WB Anita Bhatia, Director, Partnerships and Advisory Services, Operations Department, IFC Presenters: Roberto Tarallo, Manager, CFPTO, WB Urkaly Isaev, Manager, CPATF, IFC

3. World Bank Group Trust Funds Working Together Towards Alignment and Selectivity Roberto Tarallo Manager, CFPTO World Bank Urkaly Isaev Manager, CPATF IFC Session 4 May 21, 2013 The World Bank Group

4.  Cash contributions to IBRD/IDA TFs back to FY10 level, US$4.4 billion in FY12  Disbursements show an upward trend, US$4.3 billion in FY12. Spike in IFC TF disbursements in FY10 mainly due to response to global financial crisis in the form of liquidity support to trade finance WBG Trust Fund Portfolio: Recent Trends 4 US$Billions  FIFs account for the bulk of volume and growth, US$18 billion at end FY12  IBRD/IDA TFs remain stable, US$10 billion at end FY12 4 Cash contributions Disbursements Funds Held in Trust, FY08 – FY13Q2 (US$Billions) Funds Held in Trust, FY08 – FY13Q2 (US$Billions) WBG Trust Funds: Cash Contributions and Disbursements, FY08-FY12 (US$Billions) WBG Trust Funds: Cash Contributions and Disbursements, FY08-FY12 (US$Billions) IBRD/IDA TFs

5. 5 WBG Trust Funds: Multilateral Dimension IBRD/IDA TFs 58% of all recipient executed trust funds to IDA countries IFC TFs 706 761 748 780 720 757 284 213 247 233 273 289 Number of Active Trust Funds, FY08 – FY13 IBRD/IDA RETF Disbursements by Country Eligibility, FY08-FY12 (in US$ million) IBRD/IDA RETF Disbursements by Country Eligibility, FY08-FY12 (in US$ million) IFC Advisory Services Project Expenditures, FY09-FY12 (in US$ million) IFC Advisory Services Project Expenditures, FY09-FY12 (in US$ million)  10 % reduction in the number of IBRD/IDA trust fund accounts over the last 4 years  Growth of IFC TFs driven by annual average growth of 6-10% in Advisory Services  MDTFs share in the total number of IBRD/IDA accounts increased to 50% of the total in FY13Q2 up from 31% in FY08 61% of all project expenditures are for IDA countries IDA $428 61% FCS $144 20.5% Others $276 35%

6.  Fragile States receive about 40% of total RETF disbursements IBRD/IDA TFs: Disbursements 6  The ratio of disbursements between RETFs and BETFs remains largely stable over time  RETF disbursements of US$3.6 billion in FY12 accounted for 85% of total disbursements of IBRD/IDA TFs Primary Role of Recipient in TF Execution FY08-FY12 Primary Role of Recipient in TF Execution FY08-FY12 RETF in Support of Fragile and Conflict Situations, FY08-FY12 RETF in Support of Fragile and Conflict Situations, FY08-FY12

7. Trust Fund Reform Pillars: Trust Fund Reform Roadmap 7 I. Strategic Alignment III. Cost Recovery and Efficiency IV. Oversight by Senior Management and Board Strategic Alignment and Selectivity IBRD/IDA Trust Funds: new Initiatives to enhance “upstream” strategic alignment Umbrella Facilities Portfolio Reviews TF Fundraising Coordination tools FIFs: New Partnership and FIF Framework IFC TFs: Focus on global thematic trust funds and partnership framework agreements Integration in Business Processes IBRD/IDA Trust Funds: principle is to apply Bank processes regardless of funding source Integration of BETFs in budget and planning processes Integration of RETFs in operational policies and systems Streamlining of small RETF grants TF Results Reporting IFC TFs: Integrated into annual IFC budget & planning processes Cost Recovery and Efficiency Fees adjustments to achieve full cost recovery (IBRD/IDA TFs) Further TF fee simplification (IBRD/IDA TFs) Raising the minimum threshold for new TFs (WBG TFs) Phase out of co-terminus appointments (WBG TFs) Quarterly Business and Risk Review (WBG TFS) Periodic Reporting: TF Annual Reports, TF Risk Report (WBG TFs) New Web-based reporting tools (WBG TFs) New FIFs subject to MDs-CFO review and Board approval Oversight by Senior Management and Board

8. Strategic Alignment and Consolidation  IBRD/IDA Umbrella Facilities  4 pilot umbrella facilities (UF) established based on agreed principles Gender, capacity building, trade, and education  Impact evaluation UF under preparation  WBG Donor Portfolio Reviews  More proactive management of the TF portfolio by individual donors  Improved understanding of overall TF portfolio to inform strategic discussions  Changes in the structure of a portfolio, consolidation (minimum threshold at donor side; revised approval processes/vetting )  Streamlined MDTF exit procedure introduced  Resource Mobilization Coordination  VPU level vetting of fundraising activities (WBG TFs)  Quarterly fundraising projections (WBG TFs)  Donor dashboard (IBRD/IDA TFs)  Donor Partnership Practice Group (IFC TFs) 8 Enhanced WB-IFC Cooperation in TFs  Joint WB-IFC strategic donor TF portfolio reviews (Switzerland and Canada)  Joint Donor Consultation (EC)  Joint Trust Fund Annual Reports  Integrated financial overview reporting (Quarterly Business and Risk Review)  Joint work on new trust funds for WBG (Green Growth TF and Korea- WBG Partnership TF)  Global thematic facilities with public and private sector windows (Global Agriculture and Food Security Program and Climate Change Funds)

9.  RETFs follow Bank operational procedures  RETF grants part of modernization agenda, including IL reform  Guidelines for RETFs below US$5million (small grants) introduced in FY12  Integration in Planning System  BETFs Corporate: BETFs integrated in budget documents for FY13 and FY14, including Medium Term Financing Papers, and Corporate Scorecard VPU: application of the same administrative expense planning for TFs as for Bank Budget expenditures Integrated revenue- and expenditure planning to support WBG strategy (FY15)  IFC TFs Follows IFC’s corporate budget and planning processes and project governance  Operations Portal Integration (FY14 – 15)  Merging reporting of RETF grants with Bank’s reporting - Phase 1  Additional Financing, BETFs - Phase 2 Integration with Budget and Business Processes 9

10. Cost Recovery and Efficiency  TF Cost recovery under continued review  Recent TF fee revisions aimed to address under- recovery of central unit costs IBRD/IDA Fees – April 2011 FIF Fees – July 2011  Fee simplification study for IBRD/IDA TFs (in FY12)—suggests further scope for simplification of trust fund fees  Costing methodology under review  Phase out of WBG coterminous appointments  Effective October 1, 2013, the “coterminous label” will be removed  Simplify and harmonize staffing and reporting practices, reduce administrative costs, staff mobility Volume of Signed Contributions and Number of IBRD/IDA Trust Funds, by Size, as of end FY12 10  Raising the minimum IBRD/IDA TF Size to $2 million  Effective July 1, 2013  Promotes consolidation and greater efficiency

11.  Budget Documents and Medium Term Business and Finance Papers - discussed by Board  i.e. dedicated chapter on TFs in MTBF papers for FY12-14, FY13-15  Quarterly Business and Risk Review (QBRR) - discussed by Audit Committee every quarter  New chapter on WBG TF financial trends (FY11)  New chapter on WBG TF financial risks (FY12)  WBG TF Investment Strategy Review (FY11)  Taking account of the post-financial crisis environment  Reviewed by management’s Finance Committee and by the Audit Committee  WBG TF Open Data  www.aidflows.org www.aidflows.org  finances.worldbank.org finances.worldbank.org  www.worldbank.org/fiftrustee www.worldbank.org/fiftrustee Oversight by Senior Management and the Board 11

12. 12 2013 - : Aligning the portfolio and TF management with the emerging WBG strategy 2001 -2007 : Strengthening TF fiduciary systems 2007 – 2013 : Mainstreaming into the WBG business Evolution and Future Directions of TF Management

13. Aligning Trust Funds with WBG Strategy  Trust Funds will be an important instrument in supporting the WBG’s strategy and goals  Dynamic selectivity: link to goals, comparative advantage, impact  Upstream review of new TF proposals  Strategic dialogue and consultations with TF donor partners  Potentially relevant work streams:  Country level:  CAS products for WBG to include TF mobilization, based on country and corporate priorities  Global level:  Umbrella Principles  New Management Framework Partnership Programs and FIFs  New IFC strategic partnership programs with donors 13

14.  Trust Funds strategic management and planning:  Strengthen a lifecycle approach for all programmatic TFs (entry, exit)  Focus on robust results frameworks and their consistency with WBG strategic goals  As requested by the Board, more coordinated business planning and integrated revenue/expenditure framework  Financing models that can help strategic alignment and selectivity:  Co-financing  Country Umbrellas  Global Thematic Umbrella Facilities/Funds 14 Aligning Trust Funds with WBG Strategy

15.  How can we work together to strengthen selectivity and the strategic alignment of trust fund programs?  What is the potential for expanding the use of umbrella principles, including at country level?  Are there other Trust Fund models that ensure selectivity and strategic alignment? 15 Questions for Discussion